Finland’s unemployment rate fell by 0.4 percentage points year-on-year to 8.8 per cent in January, 2018, according to Statistics Finland.
The national statistics institution reported today that the trend of the unemployment rate – that is, the unemployment rate adjusted for seasonal and random variation – stood at 8.5 per cent and that of the employment rate at 70.9 per cent in January.
“The trend of the employment rate has continued to improve rapidly towards the government’s target. The activation model may have had an impact on the statistics,” tweeted Olli Kärkkäinen, an economist at Nordea.
Pasi Kuoppamäki, the chief economist at Danske Bank, encouraged the government to set its sights even higher.
“Structural reforms should continue. An even higher employment rate would boost the public economy, increase purchasing power, supplement the drivers of economic growth and help ensure that Finnish expertise remains competitive. The government could lift the bar for the employment rate even higher,” he wrote in his assessment on Tuesday.
Kuoppamäki also highlighted that the seasonally adjusted unemployment rate has remained unchanged for five months despite the growing economy and improving employment situation.
“The sluggish decline in the unemployment rate is attributable to the considerable, 2.6 per cent growth of the workforce,” he said.
He interpreted the growth of the workforce and the large-scale return of people to the labour force as an indication of the economic growth finally beginning to boost employment and job seekers being increasingly optimistic about their employment prospects.
“Economic growth often has a belated effect on unemployment, but this time the robust economic recovery showed up in employment statistics excruciatingly slowly,” said Kuoppamäki. “Now, both labour demand and supply are on the rise. A growing number of people consequently consider it increasingly likely they will find employment and are becoming active job seekers.”
Kuoppamäki pointed out that the sustained increase in the number of job vacancies is another indication of growing labour demand. “Matching jobs and job seekers has been a struggle, however. A considerably large share of job openings are regarded as difficult-to-fill openings,” he said.
He also predicted that labour supply and demand will both continue to increase this year as a result of continuing economic growth and attempts to activate job seekers. Finland, he added, must nevertheless continue its efforts to promote the acquisition and development of skills in the workforce.
“It would be important in the long term to ensure that also short-term employment provides skills that are valuable in the labour markets. Meanwhile, investments in education should continue to guarantee that the labour force can keep step with the changes and growth,” told Kuoppamäki.